Why do people have have such visceral negative reactions to dropping house values?
Because they already own a home? Even if they have good cash flow, nobody likes to see their largest asset fall off a cliff.
What if they can afford to buy more home, and they can afford to stay and keep paying their current loan, but they cannot afford to sell because they’d have to realize a loss?
We bought in 2003 with 20% down and I can easily see this becoming the case in our situation.
